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Was UDF govt’s policy on liquor restrictions in Kerala a success?

LiveMint 11-06-2017Nidheesh M.K.

Ernakulam: Kerala chief minister Pinarayi Vijayan’s rejection of the previous government’s alcohol policy is backed by an official report that says the restrictions had no effect on drinking.

Under its new liquor policy, the Left Democratic Front (LDF) government plans to reopen about 150 bars and 585 beer and wine “parlours” that had been shut, effectively putting an end to the restrictions placed by the Congress-led UDF government in 2014.

The move begs the question: Was the previous government’s move to shut down 712 bars and 78 retail outlets a success? Did it lead to the desired policy outcomes in a state where per capita liquor consumption is one of the highest in India?

Going by Kerala’s excise department figures, the experiment failed to either reduce the availability of liquor or bring down alcohol consumption.

Instead, it drove drinkers to the nearest next outlet or bar, pulled down tourism, and increased illicit alcohol consumption and substance use.

Currently, every day about 849,000 litres of alcohol is sold in Kerala, higher than in the pre-restriction levels, as per the excise department. The figures double during festivals such as Vishu and Onam.

The restriction period saw the growth of sales of Indian made foreign liquor (IMFL) coming down by only a marginal 7%. At the same time, sales of beer (the government had allowed more beer parlours as it shut down bars) grew 80%. The state’s excise revenue, instead of dipping, rose from Rs1,777.42 crore in 2014-15 to Rs2,397.36 crore in 2016-17.

The draft report on the new liquor policy announced on Thursday argues, quoting some of these figures, that if one considers the total impact of the sale of beer and IMFL, the consumption rates have only risen.

The report also puts a doubt on the success of rehabilitation efforts. It says currently 54% of the population are heavy drinkers and 6% are addicts. Vijayan held these numbers up to describe the previous government’s liquor policy as “a complete failure”, although Congress leader and former home minister Ramesh Chennithala disagreed with such a conclusion.

The policy also severely hit tourism, an important contributor to the state economy. Between 2013 and 2015, the tourism growth rate in Kerala declined from 12.22% to 7.25%, the draft report said citing Kerala’s tourism department.

It added that the growth in so-called MICE sector (meetings, incentives, conferences, conventions, exhibitions, and events) was 9.1% in 2013, going down to 4.8% in 2014 and 0.6% in 2015. The growth in the footfalls of foreign tourists also dropped from 8.1% to 7.06% between 2013 and 2015, despite the national figure increasing from 5.9% to 10.2%.

In an interview on 2 March, V. Venu, principal secretary in the state department of tourism said Kerala is staring at an annual loss upwards of Rs2,000 crore because of the liquor restrictions.

A good section of the population who were alcohol users at one point may have turned to harmful drugs post the restrictions, according to the draft report.

It cites the increase in cases related to illicit liquor and NDPS (narcotic drugs psychotropic substances) in support. In 2013-14, 12,904 cases related to illicit liquor were registered along with 847 NDPS cases in Kerala, which by 2016-17 had increased to 25,332 and 3,835, respectively. To be sure, some unprecedented events, like the recent Supreme Court ban on liquor outlets along national highways, may have also contributed to all of these numbers.

Societal risks apart, the policy also damaged political parties, especially the Congress. The government under the previous chief minister Oommen Chandy was hit by controversy after finance minister K.M. Mani and excise minister K. Babu were embroiled in a scam over alleged wrongdoing in renewing liquor licences.

This eventually led to Mani and Babu stepping down (Babu was reinstated later). The vigilance department has not yet been able to prove the charges in the case and has given a clean chit to both the leaders.